DEBT FINANCING AND PERFORMANCE OF SELECTED SMALL AND MEDIUM ENTERPRISES IN MAKURDI METROPOLIS, BENUE STATE, NIGERIA

Abstract

Small and Medium Enterprises (SMEs) are indispensable in the growth of economies of nations globally and they need capital to boost their performance hence the need to finance their operations principally through debt. The purpose of this study is to examine the effect of debt financing on the performance of selected small and medium enterprises in Makurdi Metropolis, Benue State, Nigeria. The study specifically examined the effect of long-term debt, short-term debt on performance of SMEs in Makurdi Metropolis. A survey research design was adopted for the study. The study used primary data collected from 110 SMEs within Makurdi Metropolis. Data collected through self-administered questionnaire were analysed using descriptive statistics and multiple regression with the aid of the Statistical Package for Social Sciences (SPSS 23). The study found long-term debt, short-term debt has a significant effect on the performance of selected SMEs in Makurdi Metropolis, Benue State, Nigeria. The study therefore recommends amongst others that, policy support for financial institutions should emphasize the training of SMEs to enable them efficiently utilize debts provided to them to help improve their performance.